FCC panelists: Net neutrality protects innovation and freedom

Failure to regulate the Internet and preserve net neutrality would thwart innovation and endanger the already-fragile U.S. economy, several experts told the Federal Communications Commission on Wednesday.

Unfortunately, a district court last week said the FCC doesn’t have the power to prohibit Internet service providers from restricting access to specific websites, raising questions over the agency’s ability to regulate the Internet. Now the FCC is trying to perhaps reclassify Internet-protocol (IP) communications as telecommunications, or find some other way around the ruling.

“An Internet in the dark runs too great a risk of becoming a closed Internet,” FCC Chairman Julius Genachowski said in a video statement before an FCC workshop Wednesday at the Jackson Federal Building in downtown Seattle. Most panelists at the event agreed.

The ISP market is largely uncompetitive, said Bill Schrier, the chief information officer for the city of Seattle. In the Emerald City, for instance, Internet users have two choices: Comcast or Broadstripe (depending on their neighborhood) for cable Internet, or Qwest for DSL. Uncompetitive industries, panelists said, need regulation.

But ISPs, such as Comcast for hard-wired Internet or T-Mobile for 3G wireless, hate the current all-you-can-eat business model, said Preston McAfee, a vice president and research fellow at Yahoo. People want unlimited data access, but there are heavy users – like those who download huge video files – who use so much bandwidth they slow down the networks for the rest of us.

Nick Eaton/seattlepi.com

Panelists speak during the second of two sessions at an FCC open-Internet workshop in Seattle. From left to right: Paul de Sa, chair of the FCC’s Office of Strategic Planning and Policy Analysis; Gigi Sohn of the nonprofit Public Knowledge; Mike Sievert, chief commercial officer for Clearwire; Bill Schrier, chief information officer for the city of Seattle; Cole Brodman, chief technology and innovation officer for T-Mobile USA; and Terry Davis, technical fellow at Boeing Commercial Airplanes. (Featured during the first session were de Sa; Michael Geist, law professor for the University of Ottawa; Carl Gipson of the Washington Policy Center; Preston McAfee, vice president and research fellow at Yahoo; Barbara van Schewick of the Stanford Law School; and Simon Wilkie, chair of the USC economics department.) Click to enlarge image

During the FCC workshop, two areas of concern dominated the discussion. Comcast, for instance, restricted access to several websites, landing them in court to fight the FCC. And some ISPs would like to be able to charge Internet companies to gain access to users.

“It would allow them to pick winners and losers on the Internet,” said panelist Barbara van Schewick, an assistant law professor at Stanford University. “And there are a lot of problems with that.”

If Comcast, for instance, made Google pay fees to let users access Google through Comcast’s network, it could all but kill online innovation, she said. Imagine if a startup had to negotiate access pricing with hundreds of U.S. ISPs before it could even deliver its new product to the Web.

But Professor Simon Wikie, chair of the University of Southern California economics department and a former FCC chief economist, said that could work – if the FCC had the power to regulate it. If the FCC could help ISPs and Internet companies negotiate those fees down to zero – like has happened for Skype-to-cell calling – everyone could win. Negotiations would reignite competition, he suggested.

Carl Gipson, director for Small Business, Technology and Telecommunications at the Seattle-based Washington Policy Center, wondered whether there is “market failure” in the ISP sector. Lightly regulated industries rely on competition, but there are few ISP choices available to Americans. He hopes, however, that emerging mobile broadband will spur competition.

“Will FCC regulation benefit the consumer?” he said. “The best answer is they will see no difference from today.”

When it comes down to it, it seems that it’s only the ISPs themselves who oppose regulation. The vast majority of businesses rely on the Internet – Boeing, for instance, spends 471 million minutes a year doing dataconferencing, said Terry Davis, who works on Aircraft Network and Security, Architecture and Strategy for Boeing’s commercial airplanes division.

The United States workforce requires an open Internet to retain its competitive edge, he said.

But it’s not as simple as telling ISPs to go take a hike. Cole Brodman, the chief technology and innovation officer for Bellevue-based T-Mobile USA, said there are three main areas of concern for – in his example – mobile ISPs.

The broadcast spectrum is limited, so unlimited wireless-carrier data access will become unsustainable as IP communication grows, he said. T-Mobile and others must offer mobility, so they need to have the agility to expand their networks into new geographies – a process that would be slowed by FCC regulation. And the devices themselves, mainly battery life, limit what people can do with devices like smart phones, Brodman said.

That’s why companies such as Comcast would love to charge heavy Internet users more than light bandwidth users. But in Canada, where Professor Michael Geist of the University of Ottawa teaches law, bit-usage caps are far from popular.

Schemick suggested a compromise: a tiered billing model. In the United Kingdom, she said, a user can sign up for a service level with a certain bandwidth limit. If that user exceeds the limit for one month, the ISP lets it slide. But if it continues, the user must pay extra or switch to a higher bandwidth level, she said.

Nevertheless, that doesn’t address the issue of ISPs flat-out blocking websites, such when Comcast restricted some users from visiting bit-torrent sites. And should ISPs be able to prioritize, based on access payments or, say, the needs of police and fire departments, which users get faster Internet access?

Gigi Sohn, president and co-founder of the D.C.-based nonprofit Public Knowledge, argued that Congress has already barred ISPs from making unjust and unreasonable access restrictions. But, she said, it should not be up to the ISPs what those exceptions would be, it should be up to a regulatory agency.

It should not be the ISPs who control the Internet, it should be the people, Sohn said.

“It’s the most democratic medium,” she said, “this world has ever known.”

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Updated 9:10 a.m., April 29: Upon his request, clarified Gipson’s remarks that there perhaps is ISP market failure – rather than that the market has failed.